Rupee ends weaker; stocks edge up

(Colombo) REUTERS: The Sri Lankan rupee ended 0.2 percent weaker yesterday as banks and importers bought the dollar while stocks ended a five-session losing streak, pulling away from previous session’s near five-year closing low. The rupee ended at 170.90/171.10 per dollar, compared with its previous close of 170.60/75. The rupee had fallen to an all-time low of 171.60 per dollar on Wednesday, surpassing the previous trough of 171.00 hit yesterday, due to foreign selling in government securities and exporter greenback sales, market sources said.

The Central Bank surprised financial markets on October 2 by leaving its key policy rates unchanged, despite heavy pressure on the rupee and foreign outflows from government securities.

The Central Bank said on October 2 it purchased US$ 4 million from the market in the previous day, but it has sold a net US$ 184 million in the market so far this year to defend the currency.

The rupee has weakened 1.01 percent so far this month after a 4.7 percent drop in September against the dollar. It has declined 11.3 percent so far this year. The Colombo stock index rose 0.37 percent to 5,796.02, edging up from its lowest close since Dec. 3, 2013 hit on Monday. It fell 3.6 percent last month and is down 9.0 percent so far this year.

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Data from the Central Bank showed foreign investors selling government securities worth a net Rs.6.3 billion (US$37.04 million) in the week ended October 10. Sri Lanka has seen a net outflow of Rs.80.6 billion in securities so far this year.

The stock market turnover was Rs.1.6 billion (US$ 9.37 million) yesterday, more than twice this year’s daily average of Rs.775.7 million.